Tennessee's Tech Corridor

FRAMINGHAM (07/17/2000) - If you picture Tennessee as little more than a destination for country and western musicians, you're thinking about the wrong type of keyboard.

This state has information technology jobs aplenty, with a growing number of companies falling in the eastern Tennessee area, between Knoxville and Oak Ridge. In fact, the area has dubbed itself Tennessee's Resource Valley or the Tennessee Technology Corridor, depending on whom you ask.

What just about everyone does agree on is that the region has become a place for IT professionals to work on leading-edge technology and enjoy a low cost of living.

Job Market

At one time, working in IT in the region probably meant working for the government, either at a U.S. Department of Energy facility like Oak Ridge National Laboratories or in a U.S. Department of Defense facility.

The government has been scaling back its operations, cutting approximately 6,000 jobs over the past seven years. But those losses, mostly achieved through early retirement and attrition, have had little impact on IT workers.

More than 500 high-tech companies are between Oak Ridge and Knoxville. Federal technology transfer programs have helped spark the growth, as has the auto industry.

"The economy is pretty well diversified. There's a lot of automotive manufacturing work in the region," says Tom Rogers, president of Technology 2020, a nonprofit economic development organization. "We're surrounded by automotive plants."

Toyota Motor Corp. is located a couple of hours north, while Nissan Motor Co. and Saturn Corp. have plants about the same distance to the west. That has made the Knoxville area ideal for many automotive suppliers, virtually all of which must have extensive IT infrastructures to do business with auto manufacturers.

Companies such as Round Rock, Texas-based Dell Computer Corp. and Hewlett-Packard Co. have opened large facilities in the area. Technology 2020 is also developing a business incubator that is scheduled to open in September.

Back-office operations have expanded, with the arrival of players such as Atlanta-based Nova Information Systems Inc., one of the largest credit-card processors in the country. The many professionals in the area have yet to saturate the job market, though.

According to Glenn Zahn, president of Oak Ridge recruiting firm Staff I.T., a programmer can typically find a new position in about two weeks; a network engineer might take two to three weeks longer. And startups are on the rise.

"[The local job market is] becoming more active all the time. With the high technology coming out of Oak Ridge national lab, the workers here that are very technical are venturing into their own companies," explains Zahn.

Money Matters

Income and living expenses in Tennessee are both the good news and the bad.

The bad news: IT salaries are lower than national averages by approximately 3 percent to 9 percent, depending on the type of job. That's still better than the pay in most other occupations, which ranges 12 percent to 15 percent less than national averages.

The good news: The area's cost of living can make that money look very good.

Housing costs are 15 percent lower than the national average and almost 22 percent less than in major cities, with midrange homes running from US$80,000 to $130,000.

"Knoxville is considered a minor market, so we don't have the overcrowding, and there's plenty to go around, which drives prices lower," explains Zahn.

Other costs of living are comparably low - health care costs, for example, run 18 percent below the national average - and there's no state income tax. The Oak Ridge office of Science Applications International Corp. (SAIC), a national consulting firm, has found that its employees have an economic advantage over those working in major cities.

"To have the same standard of living, you'd have to have a 25 percent salary increase to be even," says Mike Cuddy, vice president for IT solutions at SAIC's Oak Ridge office. "Generally speaking, we find it much easier to recruit people to live in Oak Ridge, Tenn., than we do in Washington, D.C. If you have a family and are looking for quality of life, educational interest and cultural interest, this region is very attractive."

Quality of Life

The area is big on outdoor recreation, and with average temperatures of 75 degrees in the summer and 41 degrees in the winter, it's easy to see why.

Hiking, white-water rafting and kayaking, fishing and golf are less than an hour's drive from the Knoxville area. Cultural activities include a major arts festival, two symphony orchestras, several museums, a ballet company and a zoo.

The region is also relatively conservative, says Ed Lewis, senior vice president of corporate development at Internet Pictures Corp. in Oak Ridge.

That makes for a stable area with relatively little job-hopping. Those coming from out of state often arrive with a negative impression of Tennessee that gradually changes.

"When people come to visit and see what they're going to get for their dollar invested from a personal point, those questions go away," says Lewis.

If you want to hop around on the Internet, there's free access for individuals and nonprofit organizations. The Knoxville metropolitan area is moderately large, with just over 659,000 residents in 1998, according to the Census Bureau. Oak Ridge is tiny in comparison, with a population of about 27,000.

"Oak Ridge . . . is like a self-contained town. It's separated from Knoxville, and the housing market here is great," says Zahn. "The arts are better here than what you'd find in a town 10 times the size."

Education is relatively strong, with high-school students scoring 11 percent higher than the national average on the Scholastic Assessment Test in 1995. The region is home to five of the top 10 public schools in the state, and Knoxville is the site of the main campus of the University of Tennessee.

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